Meals taxes up in Pawtucket, across the state

PAWTUCKET - Food and beverage taxes are up in this city, a positive sign for restaurants and businesses that sell prepared foods.

Pawtucket was one of eight communities in The Breeze readership area to see an increase in revenue from the meal and beverage tax for the first seven months of the fiscal year, running from June 2013 to January 2014.

The city's overall revenue from that period was up 9.2 percent over the same period a year earlier, from $363,592 to $397,217.

Dylan Zelazo, spokesman for Mayor Donald Grebien, said it's difficult to know exactly why the numbers have gone up, but he imagines it's due to a combination of an improving economy, better consumer confidence, and perhaps the additions of a couple restaurants.

Tom Wallin, manager at Murphy's Law Irish Pub on George Street, said the restaurant is doing better in its second year than its first, a sign that Murphy's Law is doing the right things to attract new customers.

Wallin said he believes the local economy's "doing a little better" and people are "getting out more."

Seven other communities in The Breeze readership area all saw increases in meal and beverage tax revenue. They are: Cumberland, up 4.6 percent from $218,923 to $228,920; Lincoln, up 12.3 percent from $387,174 to $434,620; North Smithfield, up 21.6 percent from $107,837 to $131,162; Smithfield, up 12.6 percent from $331,844 to $373,746;, up 19.6 percent from $31,890 to $38,138; Glocester, up 1.4 percent from $42,436 to $43,050; and Foster, up 4.7 percent from $8,210 to $8,592.

Two communities, North Providence and Woonsocket, were among the five in the state with the biggest drop in local collections of the 1 percent meal and beverage tax.

Overall revenue for the first seven months of this fiscal year, from July through January, showed that North Providence collected $180,965 in meal and beverage taxes, compared to $203,577 last year at this time, for an overall decline of 11.1 percent. The drop of $22, 612 was more than double that of Woonsocket, which saw a decline of $11,513.

Three nearby communities, Providence, Lincoln and Smithfield, were in the top five for greatest growth during that period, with Providence raking in $115,761 over what it did a year ago, Lincoln pulling in $47,446 more, and Smithfield taking home $41,902 more.

The local 1 percent meal and beverage tax is collected on the sale of meals and beverages that are prepared away from home, according to the Rhode Island Department of Revenue, including prepared foods. The amount of tax collected is sent back, in full, to the municipality in which the meal and beverage is consumed. The 1 percent meal and beverage tax is an addition to the 7 percent sales tax on food and beverages.

Paul Dion, chief of the Office of Revenue for the Rhode Island Department of Revenue, said that overall revenue from the meal and beverage tax is up by 5.6 percent statewide, or $690,000.

"We had very strong growth in meal and beverage taxes in fiscal year 2012, 7.8, percent, and then very modest growth in the same in fiscal year 2013, 1.7 percent," said Dion in an email. "Obviously, fiscal year 2014 through January has been pretty strong at 5.6 percent."

Dion said there's "no question that the prepared foods market has been improving," but it "is not clear that it is necessarily more people going out to eat."

Consumers must pay the tax on all prepared foods, whether they're buying a cooked pizza at Dave's Marketplace or a rotisserie chicken at Stop & Shop, said Dion.

"One thing that you can say for sure is that there has been an increase in the purchase of food and beverage for immediate consumption, be it at home or at a restaurant," he said.